Managerial Accounting

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Materials purchased on account during the month amounted to $195,000. Materials requisitioned and placed in production totaled $168,000. What's the entry to record the transaction on the day the materials were bought?

Debit Materials $195,000; Credit Accounts Payable $195,000

If Department K had 2,000 units, 45% completed, in process at the beginning of the period, 12,000 units were completed during the period, and 1,200 units were 40% completed at the end of the period, what was the number of equivalent units of production for the period if the first-in, first-out method is used to cost inventories?

11,580

What's an example of a factory overhead cost?

Factory heating and lighting cost.

What is the flow of manufacturing costs?

Raw materials, work in process, finished goods, cost of goods sold 100%.

Scooby Company has applied $567,988 of overhead into production on Jobs in the Work in Process account. Actual overhead at the end of the year is $575,000. What is the adjustment for over or underapplied overhead?

$7012 Underapplied, increase Cost of Goods Sold

Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory?

Job order cost system

Job order costing and process costing are:

Cost accounting systems.

Part of factory overhead?

Amortization of manufacturing patents; Production supervisors' salaries; Factory supplies used

Types of inventories a manufacturing business report on the balance sheet?

Scott Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 12,000 units of production, a flexible budget would show:

variable costs of $52,800 and $23,000 of fixed costs

Something included in the cost of a product manufactured according to absorption costing?

Double declining balance depreciation expense on factory building.

Direct labor rate variance:

The difference between actual and standard hourly labor rate multiplied by the actual hours of direct labor used.

Direct materials quantity variance:

= standard price x (standard quantity allowed - actual quantity)

Most operating decisions of management focus on a narrow range of activity called the:

The production budgets are used to prepare which of the following budgets?

Direct materials purchases, direct labor cost, factory overhead cost

The budget that needs to be completed first when preparing the master budget is the:

Sales Budget

In order to be useful to managers, management accounting reports should possess all of the following characteristics

be provided at any time management needs information; provide objective measures of past operations and subjective estimates about future decisions; be prepared to report information for any unit of the business to support decision making

direct labor rate variance

The difference between actual and standard hourly labor rate multiplied by the actual hours of direct labor used.

What is a measure of a manager's performance working in a cost center?

budget performance report

The costs of services charged to a profit center on the basis of its use of those services are called:

service department charges

The following are advantages of decentralization:

Decentralized managers can respond quickly to customer satisfaction and quality service; Expertise in all areas of the business is difficult, decentralization makes it better to delegate certain responsibilities; Managers make better decisions when closer to the operation of the company.

income from operations

Gross profit - operating expenses

gross profit

the excess of net sales over the cost of goods sold

cost of goods sold

the total cost of buying raw materials and paying for all the factors that go into producing finished goods

All of the following should be considered in a make or buy decision:

quality issues with the supplier; cost savings; future growth in the plant and other production opportunities

cost center

a business segment whose manager has control over cost but has no control over revenue or investments in operating assets

profit center

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets

investment center

a business segment whose manager has control over cost, revenue, and investments in operating assets

revenue center

a division within a company that generates sales or revenues.

In evaluating the profit center manager, the income from operations should be compared:

to historical performance or budget

A measure of a manager's performance working in a profit center...

divisional income statements

A responsibility center in which the department manager is responsible for costs, revenues, and assets for a department is called:

a value assigned to a share of stock and printed on the stock certificate

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

stockholders' equity on balance sheet

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

decrease total assets and stockholders' equity.

What is the appropriate general journal entry to record the declaration of a cash dividends?

Cash Dividends Cash Dividends Payable

Paid-in capital on the balance sheet...

donated capital; common stock distributable; common stock

When common stock is issued in exchange for a noncash asset, the transaction should be recorded at

the fair market value of the asset acquired or the fair market value of the stock, whichever can be determined more objectively.

Major characteristics of a corporation...

A corporation can own property in its name; The financial loss that a stockholder may suffer from owning stock in a public company is limited; Corporations are required to file federal income tax returns.